Abstract [en]

Despite the proclaimed advantages and popularity of outsourcing manufacturing and knowledge-intensive business services, there are few and mainly contradictory studies of its short- and long-term effects. The main purpose of this paper is to analyze the way in which outsourcing manufacturing and design work relates to performance at plant level. The study is based on a large-scale survey among a representative sample of Swedish engineering plants. The results show no significant effects from outsourcing manufacturing on plant operating performance. The paper further shows that investments in technological and organizational capabilities explain the improvements of performance to a significantly higher extent than does outsourcing. The problems of additional costs and managing dependencies when applying partial outsourcing and separating interdependent key processes provide important insights to the analysis on the effects of outsourcing knowledge-intensive business services (KIBS).